Most people have heard of credit card points and other rewards, but there are actually several different ways that using a credit card can help you save money. We’ve put together a list below of some of the most popular ways people are saving with their cards. 

It must be emphasized, however, that credit cards require careful use and strategic spending to maximize savings. If you’re not smart with your budgeting, you can accumulate unnecessary debt with interest and fees. It’s important to charge only what you can afford and to pay your entire balance in full each month or by the end of any promotional period.

1. Transfer high interest balances.

If you currently have balances with a high interest rate, whether on credit cards or other lines of credit, then transferring those to a credit card with a lower rate could result in substantial savings. 

The key here is to take advantage of the balance transfer promotional rates that creditors provide periodically. Ideally, this would equate to a 0% or similar interest rate for a defined period of time such as 12 months. If your cards are not currently offering any promotions, then you may want to consider a new card since they almost always come with an incentive to transfer existing balances.

It’s important to have a plan and pay off the transferred balance by the end of the promotional period since the regular interest rate will kick in at that point. Most creditors offer balance transfer promotions with the hope that you won’t pay it off before the period ends. By taking advantage of the low rates and paying it off during the specified period, you’ll beat the credit card companies at their own game and see substantial savings as a result.

2. Pay for expenses using a cash back credit card.

Credit cards that provide cash back rewards for purchases can be extremely valuable. Typically, the cash is accumulated in your account and you can withdraw it via check or direct deposit once you’ve reach a certain threshold. 

Some cards offer cash back on all purchases while others offer it only for certain categories so be sure to review your terms for eligible purchases. If you're smart with your spending, you can get cash back for most expenses and the savings can be huge! Utilizing this feature for just a few of your largest expenses could result in substantial savings month after month.

As mentioned previously, it’s imperative that you pay off the entire balance each month or by the end of any promotional period. If not, the interest accrued will outpace the cash back savings and erase your savings efforts.

3. Take advantage of purchase rate promotions.

Balance transfers aren’t the only way to take advantage of super low promotional rates. Creditors may periodically provide 0% or similar rates for purchases as well. Like balance transfer promotions, these are typically only for a defined period of time, however.

The best way to take advantage of purchase rate promotions is with high-ticket items like appliances, furniture, medical procedures, and vacations. This will allow you to break up the large purchases into multiple payments without having to fork over interest. This provides financial flexibility and frees up funds that can be put toward savings or other investments.

4. Earn points and rewards for purchases.

Similar to cash back incentives, credit cards often offer several types of rewards to encourage use. The most popular is points that can be redeemed for things like gift cards, travel expenses, and sometimes even cash.

Points are typically only redeemable with companies that your creditor has partnered with, but the value can be quite high. In fact, points are almost always more valuable than cash back, but obviously not as flexible in how you can use them.

Gift cards offer a nice balance of value and flexibility so be sure to review those options before redeeming your points. Credit card companies often partner with popular retailers to offer discounted gift cards. If they’re for stores you typically shop at, this could be even better than cash.

5. Take advantage of discounts and other perks.

In addition to cash back and points, cards typically offer a variety of discounts and perks. You don't have to spend and accumulate points to take advantage of these though. They’re typically available to all card members and all you need to do is use or show your card to reap the savings.

Your card may offer discounts for affiliated hotels, airline carriers, retailers, and even membership programs like AAA. Often, card companies partner with a set of national retailers to offer a “discount mall” that provides deals for cardholders. Review your cardmember agreement or simply contact a representative to find out what’s available.

Some lesser known perks may include extended warranty benefits and even rental car insurance. When purchasing appliances and electronics, you may opt for the extended warranty to protect your investment. Some cards include an extended warranty already built-in for such purchases so you could save on those extra out of pocket costs. Same goes for rental car insurance. You may be able to save on that as well since it’s also a common perk.

Price protections and sign up bonuses are also benefits to keep an eye out for. Everybody hates it when you buy something only to see it cheaper somewhere else soon after. Some cards may offer a price adjustment and refund you the difference. Sign up bonuses are typically only available, you guessed it, when you sign up! So the next time you’re looking for a new card, make sure to check if any bonuses are available. You’ll likely need to spend a certain amount in a defined period of time, but the savings can be substantial.